Glencore has become the latest dry cargo player to be caught up in a growing political dispute between China and Canada.
China is reported to have block canola shipments from Viterra, which is part of Glencore Agriculture, over alleged contamination issues.
A statement on China’s General Administration of Customs website said officials detected “several hazardous organisms” in canola shipments from the company.
China has been a major market for Canadian canola, accounting for about 40% of the 10.7mt of canola seed, oil and meal it exports.
Canola seed exports to China were worth $2.7bn in 2018. Demand has been very strong until recent disruptions, according to the Canola Council of Canada.
Industry officials and China experts say Beijing’s canola moves are part of efforts to persuade Canadian authorities to release Huawei Technologies CFO Meng Wanzhou.
TradeWinds reported earlier this month that China was blocking imports of canola from Canada’s Richardson International – one of the country’s largest grain producers.
However, t he dry bulk sector was expected to emerge largely unscathed from the trade dispute, according to industry observers.
“Canada is the world’s second largest producer of canola after the European Union (EU), and by far the largest exporter of canola seeds accounting for at least three quarters of global canola seed exports,” Ralph Leszczynski, Banchero Costa’s head of research in Singapore, told TradeWinds at the time.
“The EU is the largest producer but it consumes even more and is a net importer. So it seems there are very few real alternatives for China to substitute Canadian canola.
“Shipping-wise, in the global scale of things, the 4.2mt of canola seeds China imported from Canada in small stuff, in comparison for example with the 18-20mt per year of soybeans that China imports every year from the US.”
Leszczynski said the attention of the shipping world was firmly focused on what is happening with Vale in Brazil and with the trade spat between the US and China.
“Further confusion and disruption on the China-Canada front is obviously unhelpful, but remains just a side show,” he said.
